Corporate Governance

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Corporate management takes the win in this week’s New York Business Divorce with what appears to be the first New York appellate decision to apply the business judgment rule to a decision by a board of directors to oust one of its own under the “cause” standard for removal found in Section 706 of the Business Corporation Law. Whether there is, or is not, “cause” to fire a co-director, held the Court, is a matter falling comfortably within the board’s business judgment, even as a response to aggressive activism. So behave on that board. Otherwise, your colleagues may show you the door.…

Continue Reading Co-Director Removal and the Business Judgment Rule

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Some business divorce cases are about money. Others are about control. Today’s case, Homapour v 3M Properties LLC, 2026 NY Slip Op 04371 (1st Dept 2026), is about both.

As we often see with second and third generation closely-held family businesses, the informal trust and family hierarchy that may have helped build the enterprise…

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When shareholder oppression is real but dissolution is too much, should courts give majority owners a chance to straighten out before imposing the corporate death penalty?

 
 
 

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Continue Reading Is it Time for Courts to Embrace Shareholder Oppression Outside of the Corporate Dissolution Context?

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Can a three-person minority outvote a four-person majority to oust the majority-appointed, longtime CEO of a profitable company (who also happens to be the founder of the company) in a vote requiring supermajority approval?

The math ain’t mathing, you may be saying to yourself.

But today, we explore a case—SJI Renewable Entery Ventures LLC, …

Hop Farmers

The Appellate Division, Second Department delivered last week a fascinating case pitting a deadlock-based LLC dissolution petition against an equity forfeiture provision in the parties’ operating agreement.  Add to that a bracing reminder that lazy pleadings and procedural missteps in special proceedings can be outcome-determinative, and Ribeiro v Libutti, 2025 NY Slip Op 06865 (2d Dept Dec. 10, 2025), becomes a cautionary tale for business owners and litigators alike.…

Continue Reading Hop Farmers Face Membership Forfeiture as a Deadlock Breaker and a Bitter Lesson on Pleading Shortcuts

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Strict compliance with contractual conditions precedent, yea or nay? In New York, it depends.

Now, the general rule is that strict compliance with contractual conditions precedent is required. The New York Court of Appeals has previously held: “Express conditions must be literally performed, substantial performance will not suffice” (MHR Capital Partners LP v Presstek, …

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Four sisters. One house. Who owns it?

Today’s case delves into a thorny situation many closely-held family businesses struggle with—proving ownership.

It’s no secret that many closely-held family business do not comply with corporate formalities. In the absence of such formalities, it can be difficult to demonstrate ownership without stock certificates in hand, or other…

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“Except as otherwise set forth herein” is a common proviso in agreements of all sorts. It can provide clarity. It also can cause dispute, as in the case highlighted in this post.…

Continue Reading A Wolf in Sheep’s Clothing: Shareholder Agreement’s “Except as Otherwise Set Forth Herein” Hands Control of Famed Restaurant to Minority Shareholders